Personally I would like games with in app purchases to be in the "paid" category with a price "0" (or "0+"). Maybe even include how much the average player pays for it. I don't much care whether this is achieved through regulations, or done by companies themselves.
Apple has featured a game today that they have listed as free. The largest IAP is $55, but that price is hidden behind extra clicks. This means that when a consumer is comparing two apps they have extra work to do to compare true prices.
This hidden pricing has cause harm.
Developers cannot advertise a game with an honest price. An app sold at £5.99 would struggle in todays app store. So devs have to list games as free but with IAPs.
And you don't need to buy IAP to beat most game. This is like saying I can't list my shop as having "free" shipping because people prefer to pay more for overnight delivery.
Your point about overnight delivery is reasonable. Some games are playable without IAPs. But some games have a degraded experience without IAPs - timers that the player need to wait for is one example - and some games are going to be unfun without IAPs.
I've enjoyed many free games that others complained they had to pay to play. PvZ2, for example.
And then let's apply this thought process to every startup out there offering a free tier. How quickly people would turn around if I put conditions: "Your Free tier ain't free if I can't use it for real business."
It costs money to develop games and apps. A quality title might cost over a million dollars in development. What makes the consumer believe they deserve to get it for free?
iAPs are not necessarily evil - they are a great and perfect way of pricing things for different subsets of people. If you reduce iAP revenue, you make developers more driven toward ad revenue.